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Editor’s Note: One of the most important investing themes I’ve been highlighting over the last year is the surge in AI stocks. But I’m not just paying attention to the headline names like Nvidia…
Cybersecurity is rapidly becoming one of the most essential areas of investment in this sector. In today’s essay, I want to show you where the winners in this new spending cycle are emerging – and I want to put something else on your radar as well.
On October 14 at 8 PM EST, I’m holding my free $10K to $100K Challenge, where I’ll break down the strategy behind some of the biggest trading opportunities I’ve highlighted over the years and show you how you can start putting that same process to work.
We’ve seen that process play out in AI picks like BFLY and DOX, where unusual options activity helped point us toward trades that gained 219% and 534%, respectively. We’ve also had past recommended trades like OXY and BMY generate gains of 779% and1,076%.
Those are individual past results — not promises of future performance. But they show what can happen when you combine the right stock, the right setup, and disciplined risk management.
And that’s what I want to teach you on October 14.
You don’t need to start with $10,000, either. I’ll show you how the same process can be applied to smaller trades, including opportunities where the amount at risk can be less than $500.
Make sure to click here and reserve your free spot for the $10K to $100K Challenge.
Just after midnight on January 25, 2003, a tiny piece of code began racing across the internet.
It was a computer worm — dubbed the SQL Slammer — that could copy itself from one vulnerable machine to the next without anyone clicking a link.
Slammer was only 376 bytes long. It simply told each infected server to send out more copies of itself, as fast as it could.
That was enough.
The number of infected machines doubled about every 8.5 seconds. Within 10 minutes, Slammer had reached more than 90% of the computers vulnerable to it. The flood of traffic knocked networks offline, interfered with ATMs, and disrupted airline flights.
Microsoft Corp. (MSFT) had released a fix for the weakness Slammer exploited months earlier, but plenty of organizations still hadn’t installed it.
We’re at a similar moment with AI agents—software that can search for information, use tools, and carry out tasks with little human guidance. Companies putting agents to work have to control what those agents can access and catch them when they do something nobody intended.
Recent incidents have shown why. OpenAI says its reviews have found agents from their lab bypassing access controls, using exposed credentials, and interacting with third-party systems beyond their intended access. It has notified dozens of affected hacked parties – including the Australian and U.S. governments – while the reviews continue.
That creates a new job for cybersecurity companies. And I see two stocks investors should consider buying now.
Let me show you what each company sells—and what I’m watching before making a trade.
AI Agents Need Someone Watching the Door
Think of an employee’s credentials as a set of keys. An AI agent working for that employee may need access to certain files and applications. Give it too many keys, and an error—or an attacker manipulating the agent—can carry it somewhere it shouldn’t go.
That makes identity security unusually important.
This is where Palo Alto Networks Inc. (PANW) has made a significant move. It completed its acquisition of CyberArk in February, adding that company’s identity-security products to a business that already sells network, cloud, and security-operations tools.
In plain English, Palo Alto is trying to give large customers a single place to manage more of their defenses, including the permissions granted to AI agents. The integration is still underway, so investors need to watch how well it delivers on that plan.
In its latest reported quarter, Palo Alto’s revenue rose 34% from a year earlier, to $3.41 billion. Its next-generation security annual recurring revenue—the value of subscriptions it expects to collect over a year—reached $9.1 billion. Those figures include the effects of acquisitions, so I’m watching what growth looks like as the businesses are brought together.
PANW is my first buy of the two. It gives me a large, established cybersecurity business with a clear path to sell more to customers as they add AI agents.
CrowdStrike Holdings Inc. (CRWD) comes at the AI agent problem from another direction.
Its Falcon software already operates across customers’ computers and other devices—the places where a great deal of AI-agent activity starts. This month, CrowdStrike introduced Falcon Guardian, designed to help companies discover which agents are running, see what they do, control which ones have permission to run, and respond when their behavior becomes dangerous.
It’s a new product, so I would watch customer adoption before assuming it will become a major revenue source.
CrowdStrike ended its latest reported quarter with $5.84 billion in annual recurring revenue, up 25% from a year earlier.
I would buy CRWD, too, but I’d start with a smaller position. Investors already recognize how strong this company is. That can leave less room for disappointment if a new product takes longer to catch on or growth slows.
And spending on security is still growing. Gartner forecasts worldwide information-security spending of about $244 billion in 2026, with demand for products that both use AI to improve defenses and secure companies’ own AI use.
Even if the Company Is Right, the Trade Still Has to Work
I look for a good business first. Then I look at the market – and I see where the Unusual Options Activity (UOA) is building.
For example, in August, we spotted a spike in trading activity in oil-services company SLB NV (SLB). I recommended a bullish trade. Over the following week, SLB shares rose about 9%. Our recommended trade gained 219%.
We saw another example in MP Materials Corp. (MP). Our recommended trade returned 534% in three days. For both examples, the maximum possible loss was the amount paid for each contract.
Those were standout winners. These trades can also expire worthless, which is why choosing the trade and controlling its size matter as much as finding the company.
So if I see that activity in a stock, I check the news, the stock’s price, and the amount I could lose. Some days I’m looking at cybersecurity. Other days, it’s energy, healthcare, or a company I hadn’t expected to discuss when the market opened.
These are just a handful of the setups I watch every single day. But finding the companies worth watching is only the beginning. Just like I showed you with those past examples, managing the trade to success is the end game.
That’s what I’ll be showing you on October 14. I’m holding my free $10K to $100K Challenge, where I’ll explain the strategy behind some of my biggest trading opportunities and how you can start putting that method to work.
Click here to reserve your free spot for the $10K to $100K Challenge.
We’ll go deeper into how I spot unusual options activity that can reveal where big investors are placing their bets, and then use that information to identify specific trades. I’ll also explain how you can participate starting with less than $10,000, including opportunities that involve risking less than $500.
I see even more opportunities to apply this process to an emerging layer of AI cybersecurity trades that aren’t on many traders’ radars right now.
Names like Palo Alto and CrowdStrike have a real chance to collect a meaningful share of the spending hitting this space. With the process I teach, I can give you the tools to find even more opportunities like PANW out in the wild.
Just click here to sign up for my $10K to $100K Challenge.
Remember, the creative trader wins…
Jonathan Rose
Founder, Masters in Trading
